PROPERTY NEWS - If you’re thinking of upgrading to a new and more spacious home in the near future, experts reveal 2018 is the year to make the leap to get the best deal. With interest rates falling, and demand on the rise, Berry Everitt believes now is the time to trade up. “The reason is that if they wait for a ‘sellers’ market’ to become fully fledged, they will also have to buy their new homes in that market – and could end up paying quite a premium.”
Everitt warns that if sellers wait too long to put their home on the market, they might get a higher price, but also end up paying more than expected for their new home. In the end, sellers might be worse off, and pay more for upgrading. A delayed sale of an owner’s home, in other words, could lead to needing a higher deposit, and applying for a bigger home loan, running the risk of not qualifying for a bond.
A delayed sale not only affects the upfront costs, but also the cost of the transfer duty and transaction costs on the new home. If property prices rise by 6% this year as expected, buyers will find it harder to qualify for a bond. If, for example, you want to upgrade to a home that is on the market for R1.5 million, you’ll need a salary of at least R41 000 per month to qualify for an 80% bond, instead of R38 000 per month before the 6% increase. Everitt adds, “the total of transfer duty and transaction costs such as bond registration and legal fees will rise from about R66 000 to R71 000, and the additional amount required for a 20% deposit will be R18 000.”
Whether you’re looking to move further out into the country and purchase a bigger property for sale in Oudtshoorn, or move into a bigger property closer to the centre of town, looming house price increases means it’s advised you upgrade sooner rather than later.
